Bitcoin Buying Pressure Archives

Coinbase Has Just Seen A $1.4 Billion USDC Inflow

As pointed out by analyst Maartunn in a post on X, a large amount of USDC has flowed into Coinbase during the past day. The on-chain indicator of interest here is the “exchange inflow,” which keeps track of the total amount of a given asset entering into the wallets associated with a centralized exchange or group of platforms.

A spike in the exchange inflow can indicate that investors are interested in trading away the cryptocurrency. In the case of an asset like Bitcoin, such a trend can naturally be a bearish signal for the price.

In the context of the current discussion, though, a stablecoin is of focus. While USDC exchange inflows would also imply that the holder wants to sell the asset, the transaction wouldn’t affect the price since, by nature, the coin always remains stable at around $1.

This doesn’t mean that the sale of USD Coin isn’t of interest to the cryptocurrency sector as a whole, however. If investors are swapping stable coins in favor of volatile coins like BTC, then the prices of these latter assets would observe a buying effect.

Now, here is a chart that shows the trend in the USDC exchange inflow over the past month:

The above graph shows that the USDC exchange inflow has just registered a huge spike. According to Maartunn, this inflow was headed towards the cryptocurrency exchange Coinbase.

In total, $1.4 billion worth of the stablecoin has entered the platform’s wallets with this inflow, the largest the exchange has ever observed. Given the extraordinary scale, this could prove to be quite bullish for Bitcoin and others if the entity behind the inflow is planning to go on a buying run with this dry powder.

There also exists the scenario, however, where the whale actually intends to trade away the USD Coin stack in favor of fiat rather than using it to buy other cryptocurrencies. In such a case, a net amount of capital would be exiting the sector, which would be a bearish sign.

It now remains to be seen whether the massive USDC deposit indeed ends up causing any noticeable fluctuations in the volatile side of the market, particularly in the price of Bitcoin.

The positive Bitcoin Coinbase Premium that drove the latest rally above $70,000 has dissipated, suggesting buying has already slowed down.

Bitcoin Coinbase Premium Gap Has Returned To Neutral Levels

CryptoQuant Netherlands community manager Maartunn explained in a post on X that the Bitcoin Coinbase Premium Gap has declined back toward the neutral line.

The “Coinbase Premium Gap” here refers to a metric that keeps track of the difference between the BTC prices listed on cryptocurrency exchanges Coinbase (USD pair) and Binance (USDT pair).

When the value of this metric is positive, it means that the price listed on Coinbase is greater than that on Binance right now. Such a trend implies that the buying pressure on the former is higher than that on the latter platform (or alternatively, the selling pressure on there is just lower).

On the other hand, a negative value can imply the selling pressure on Coinbase is higher than on Binance as the price of the cryptocurrency listed there is lower.

Now, here is a chart that shows the trend in the Bitcoin Coinbase Premium Gap over the past few days:

Bitcoin Coinbase Premium Gap

The chart shows that the Bitcoin Coinbase Premium Gap had taken to notably positive values as the latest upward push in the asset’s price had occurred. Since then, though, the metric has fallen, with its value approaching zero.

It would seem that the buying pressure on the platform contributed to the surge. The fact that the rally has slowed since the metric returned to neutral levels may add further evidence.

This isn’t unnatural for this year, however, as the Bitcoin price and Coinbase Premium Gap have shown a pretty tight relationship since the start of 2024.

Coinbase is popularly known as the preferred platform of American institutional investors, while Binance hosts more global traffic. As such, the premium’s value provides insight into how the behavior of the US-based large holders differs from that of world users.

Since the Coinbase Premium Gap has been the driver of the recent price surges, buying from these institutional entities could potentially have provided the fuel.

As the indicator’s value has now neared the neutral mark, it would imply that these whales have lifted their foot off the gas. Given the close relationship the metric and BTC price have held recently, it may be worth keeping an eye on how things develop in the coming days.

BTC may register some decline if the premium flips into the red from here. Naturally, a continuation of positive values would be a bullish sign instead.